Post Session: Quick Review

Benchmark equity indices after see-sawing throughout the trading session and extending two consecutive session’s declining streak, settled flat with negative bias on prevailing caution with the start of phase 1 of general elections. Nonetheless, last minute buying rush by select market-participants, which used recent dip as an opportunity to buy fundamentally strong, but beaten down bets aided benchmarks erase most of the early losses. Pessimistic global set-up combined with absence of any positive trigger mainly dictated the market trend for most part of the session. By close of trade, both Sensex and Nifty settled below the crucial 22,500 and 6700 levels respectively, with slender losses. Meanwhile, broader indices ended mixed; with Midcap index underperforming larger peers and Smallcap index with quite a substantial margin.

On the global front, Asian markets retreated Monday, taking their lead from a sell-off on Wall Street despite a healthy US jobs report. On Friday the US Labor Department said the world’s number one economy added 192,000 jobs in March -- just below forecasts of 195,000 -- while the unemployment rate held steady at 6.7 percent. Meanwhile, European shares after receiving negative hand-over from Asian counterparts, was trading lower in early deals.

Closer home, amidst across the board selling pressure, while most of the sectoral indices ended into negative territory, stocks from Metal and FMCG counterparts managed to stage resilience. On the flip side, Realty, Consumer Durables and Power counters were the top laggards of the session. Meanwhile, shares of cement manufacturers, Ultra-Tech Cement, Ambuja Cements, ACC, Grasim Industries and Prism Cement were firm in an otherwise weak market on expectations of higher profit growth for the quarter ended March 2014, on a sequential basis, due to pick-up in cement prices and demand. In stock-specific activity, Sun Pharmaceuticals shares hogged all the limelight after it inked agreement to acquire 100% of Ranbaxy in an all-stock transaction. Under which, Ranbaxy shareholders will receive 0.8 share of Sun Pharma for each share of Ranbaxy. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1409: 1176, while 106 scrips remained unchanged. (Provisional)

The BSE Sensex lost 16.05 points or 0.07% to settle at 22343.45. The index touched a high and a low of 22481.62 and 22197.51 respectively. Among the 30-share Sensex, 14 stocks gained, while 16 stocks declined. (Provisional)

The BSE Mid cap index ended lower by 0.45% and Small cap index ended higher by 0.22%. (Provisional)

On the BSE Sectoral front, Metal up by 0.24% and FMCG up by 0.14% were the only gainers, while Realty down by 1.37%, Consumer Durables down by 1.24%, Power down by 0.69%, Bankex down by 0.40% and Healthcare down by 0.25% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 2.29%, SSLT up by 2.16%, Mahindra & Mahindra up by 1.47%, Tata Steel up by 1.14% and Coal India up by 1.06%, while, BHEL down by 3.37%, ICICI Bank down by 1.98%, Cipla down by 1.89%, Dr Reddys Lab down by 1.78% and Maruti Suzuki down by 1.25% were the top losers in the index. (Provisional)

Meanwhile, the growth in credit demand from industries slowed down to 12.2% to 19,970 crore in the month of February as compared to 18.9% growth in the same month of previous year. Prevailing economic slowdown coupled with political uncertainty associated with an election year have made corporates reluctant to launch any greenfield projects, resulting in declining credit demand from industrial sector. Slow credit flow to industrial sector has been adversely impacting domestic banks which are now pushing retail credit to boost credit growth.

High borrowing cost and delays in environmental clearances for industrial and infrastructure projects has forced the big infrastructure players to defer their investment decisions. Indian large infrastructure companies such as HCC, Lanco and Gammon India are struggling with high debt and have restructured them to avoid loan default.

The gross non-performing assets (NPAs) of banks would rise to 4.2-4.4% by March, from 4.1% reported in December 2013. Rising NPA levels have become an issue for growth of the banking industry, which is the most dominant segment of the financial sector and plays an important role in the economic development of the country. Banks help to channel savings into investments and encourage economic growth by allocating savings to investments that have potential to yield higher returns.

Meanwhile, risk appetite of industrial firms is likely to improve after the formation of new government, which could provide a boost to credit growth.

India VIX, a gauge for markets short term expectation volatility gained 9.98% at 24.95 from its previous close of 22.68 on Friday. (Provisional)

The CNX Nifty lost 1.70 points or 0.03% to settle at 6,692.65. The index touched high and low of 6,725.15 and 6,650.40 respectively. Out of the 50 stocks on the Nifty, 24 ended in the green, while 26 ended in the red.

The major gainers of the Nifty were UltraTech Cement up 3.11%, Ambuja Cements up by 3.02%, Sun Pharmaceuticals up by 2.65%, NMDC up by 2.35% and SSLT up by 2.05%.

The key losers were Jindal Steel down by 5.96%, BHEL down by 3.43%, DLF down by 3.15%, IDFC down by 2.32% and Cipla down by 2.08%. (Provisional)

Most of the European markets were trading in red; France’s CAC 40 was down 0.58%, UK’s FTSE 100 was down 0.43% and Germany’s DAX was down by 1.10%.

The Asian markets concluded Monday’s trade mostly in red tracking cues from Wall Street where stocks ended notably lower on Friday. Chinese markets remained shut for the trade today for Ching Ming Festival holiday. Japanese Prime Minister Shinzo Abe will review economic conditions in a more detailed fashion than he did last year before giving the green light for another consumption-tax increase. Japan raised its sales tax to 8% from 5% on April 1 after the PM made a final decision to do so last fall. The government plans to raise the tax further to 10% in October 2015. Indonesia’s consumer confidence index rose to its highest level since November 2012 amid expectations of an improving economy. Bank Indonesia’s consumer confidence index rose to 118.2 in March a 2-point increase from a month earlier and a 1.4-point increase from the same month last year. Taiwanese Trade Balance rose to a seasonally adjusted annual rate of 1.95B, from 1.57B in the preceding month.